In this Nov. 17, 2009, file photo, a bank clerk stacks up renminbi banknotes at a bank in Hefei in central China's Anhui province. (AP Photo/File)

(Newser)
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When Japan’s finance minister complained last week about recent Chinese purchases of Japanese bonds, it “made me want to bang my head against the wall in frustration,” writes Paul Krugman of the New York Times. See, the US has repeatedly refused to do anything about China’s constant currency manipulation, afraid China would stop lending to us. But “Chinese purchases of our bonds don’t help us—they hurt us. The Japanese understand that. Why don’t we?”

China artificially depresses its currency, creating a huge trade surplus that costs everyone else sales and jobs. The US should impose a tariff—but won’t, because it fears China will stop buying US bonds. But so what if they did? The dollar would fall, but that would just boost American exports. The only other reason to hold back: fear of reprisals against US-owned corporations in China. “This is a good time to remember that what’s good for multinational companies is often bad for America,” writes Krugman, “especially its workers.” For more from Krugman, click here.

What's more important is the question of "What does China want to buy from us?" The answer will probably be "Airplanes, tech, weapons, IOUs and not much else"

Fascist_Jack

Sep 13, 2010 8:54 PM CDT

The solution is simple: Abolish the minimum wage in America. Sounds crazy? Well think about it, if you want to start a company that is actually going to compete in the global market, you are going to have to take your manufacturing over seas anyway. The end result is that: 1. You are bringing no employment at all to the states. 2. You are giving a foreign entity economic power of your mother country by having your manufacturing over there. Simply imposing tariffs on Chinese made goods wont do it because there could be a competitor to your company from Australia who is using cheaper Chinese labor. So how then will you compete in that situation? Especially since your customers are world wide, and not just in the US....

DontLikeYou___

Sep 13, 2010 6:57 PM CDT

Krugman for the last year = We need more stimulus money (which means more borrowed money). Krugman today = Borrowing money from China is bad. Moral = Liberals are idiots.